CHAPTER 5

Stakeholder Engagement

As stakeholders have a different level of interest in the program, it is important to manage their expectations based on their needs. This chapter describes the stakeholder engagement domain, including how to engage and manage stakeholders. It introduces a stakeholder map, a tool that allows managing stakeholders. The chapter concludes by describing how to manage conflicting stakeholder priorities.

The chapter covers the following key aspects:

• Stakeholder identification; and
• Stakeholder engagement and conflicting priorities management.

Stakeholder Identification

Since multiple stakeholders will likely have a voice in whether or not a program is funded, stakeholder management is a critical responsibility for the program manager to fulfill. The existence of differing needs, desires, and competing agendas among key stakeholders may never be as high on a program as when the major investment decision is approaching. A program manager should expect to spend significant time engaging with his or her stakeholders. Stakeholder engagement will involve gaining agreement on the program value proposition, gaining the commitment of resources to execute the program, and addressing the concerns of the stakeholders as best possible.¹

Stakeholders represent all those who will interact with the program as well as those who will be affected by the implementation of the program. Program and project managers have traditionally classified and managed stakeholder expectations like the approach for identifying and responding to risks. Stakeholders, like risks, should be identified, studied, categorized, and tracked. Stakeholders, like risks, may be internal or external to the program and may have a positive or negative impact on the outcome of the program. Program and project managers need to be aware of both stakeholders and risks to understand and address the changing environments of programs and projects.²

Initial program stakeholder identification is performed during the definition phase. The goal during this phase is to identify as many stakeholders as possible. Documents that help identify stakeholders include business case, road map, and environmental analysis. Identified stakeholders are being logged into the stakeholder register. As more information about a program becomes available during the benefits delivery phase, additional stakeholders may be identified and logged into the register. A critical success factor is to create a register early and update it regularly during the benefits delivery phase.

Stakeholder types may vary for different organizations and programs. Examples of program stakeholders include:

• The program sponsor is an individual who champions a program, and is responsible for providing program resources and delivering program benefits.
• The program governance board is a group responsible for ensuring that program goals are achieved and providing support for addressing program risks across the organization.
• The program manager is an individual responsible for managing the program.
• The project manager is an individual responsible for managing the component projects within the program.
• Program team members are individuals performing program activities.
• Project team members are individuals performing constituent project activities.
• The funding organization is a part of an organization or an external organization providing funding for the program.
• The performing organization is a group that is performing the work of the program through component projects and nonproject work.
• The program management office is an organization responsible for defining and managing the program-related governance processes, procedures, and templates, supporting individual program management teams by handling administrative functions centrally, or providing dedicated assistance to the program manager.
• Customers are individuals or organizations that will use the new capabilities/results of the program and derive the anticipated benefits. The customer is the major stakeholder in the program final result and will influence whether the program is judged to be successful or not.
• Potential customers are past and future customers who will be watching intently to see how well the program delivers the stated benefits.
• Suppliers are product and service providers who are often affected by changing policies and procedures.
• Governmental regulatory agencies are organizations that operate within the regulatory and legal boundaries of their local and national sovereign governments, as well as other related nongovernmental organizations that set standards or requirements that must be adhered to.
• Competitors rely on the benefits of the performing organization program as a component of one of their programs. Thus, competitors are interested in the success of the program. Competitors may also benchmark their success in comparison to the performing organization's success. Impacted competitors may be managed as stakeholders.
• Affected individuals or organizations are those who perceive that they will either benefit from or be disadvantaged by the program activities.
• Other groups are groups representing the consumer, environmental, or other interests.

Stakeholders have a different level of interest in and influence over the program. Having a different level of needs, various stakeholders require a different level of management. A stakeholder map, presented in Figure 5-1, aids with analyzing stakeholders and breaking them into four different categories based on their level of interest in the program:

• Manage closely is the category that includes high-power and high-interest stakeholders that have both high interest in and high influence over a program.
• Keep satisfied is the category that includes high-power and low-interest stakeholders that have low interest in, but significant influence over a program.
• Keep informed is the category that includes low-power and high-interest stakeholders that have high interest in but low influence over a program.
• Monitor with minimum effort is the category that includes low-power and low-interest stakeholders that have both low interest in and low influence over a program.

Using the program stakeholder list, we will assign each stakeholder into one of the four categories on the stakeholder map.

• The manage closely category includes the program sponsor, the program governance board, the program manager, and a funding organization.

  

• The keep satisfied category includes the program management office, government regulatory agencies, and suppliers.
• The keep informed category includes the program team members, the project manager, the performing organization, customers, and potential customers.
• The monitor with minimum effort category includes competitors and affected individuals or organizations.

Unlike risks, stakeholders cannot be managed, only stakeholder expectations can be managed.³ Stakeholders have a different level of engagement. Stakeholders’ levels of engagement can be defined as follows:

• Unaware is when a stakeholder is not aware of a program and is not engaged with it;
• Resistant is when a stakeholder is resistant to a change a program will bring;
• Neutral is when a stakeholder is aware of a program, but is not engaged with it or have any influence over a program;
• Supportive is when a stakeholder is supportive of a change a program will bring and has influence over a program; and
• Leading is when a stakeholder is actively engaged with a program and has the necessary level of influence over it.

A program manager prepares a stakeholder engagement plan and engages stakeholders, changing their level of engagement as needed through the program life cycle. A program manager also works with the stakeholders to manage their conflicting priorities to reach the required level of engagement and secure the necessary level of influence over a program.

Stakeholder Engagement and Conflicting Priorities Management

The primary goal of stakeholder engagement activities is to establish stakeholder alignment to the strategic goals, intended business benefits, program objectives, and success criteria of a program. It involves putting action to the stakeholder strategy through the building of professional relationships to influence for program advocacy and to monitor stakeholder actions, words, and decisions.⁴

Stakeholder Engagement Planning

The stakeholder engagement planning activity outlines how all program stakeholders will be engaged throughout the duration of the program. The stakeholder register is analyzed with consideration of the organization's strategic plan, program charter, and program business case to understand the environment in which a program will operate. As a part of the stakeholder analysis and engagement planning, the following aspects for each stakeholder will be considered:

• Organizational culture and acceptance of change;
• Attitudes about the program and its sponsors;
• Expectation of program benefits delivery;
• Degree of support or opposition to the program benefits; and
• Ability to influence the outcome of the program.⁵

Stakeholder Engagement

Similar to many other pieces of a program's information, a list of stakeholders and their roles changes during the program life cycle, as does the stakeholder level of interest and influence. That is why stakeholder engagement is a continuous activity throughout the program life cycle. Stakeholder engagement starts during the definition phase, continues during the benefits delivery phase, and ends during the program closure phase.

During the definition phase, a program manager conducts a stakeholder engagement planning activity. A program manager identifies program stakeholders, creates a stakeholder register, and engages stakeholders.

During the benefits delivery phase, using a stakeholder map, a program manager manages stakeholders. Stakeholder engagement management is a process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur, and foster appropriate stakeholder engagement in project activities throughout the project life cycle.⁶

As part of the stakeholder engagement management process, a program manager compares stakeholders’ current engagement levels with the desired engagement levels. A program manager also identifies and implements strategies to increase stakeholder-engagement levels as needed. A program manager engages stakeholders in influencing decisions related to their areas and keeps them updated about a program's progress. Outputs of stakeholder engagement include risk mitigation; updates to the program management plan and program documents; and change requests to the program scope, budget, and time line.

During the program closure phase, a program manager communicates program benefits delivery to the shareholders. The program manager also communicates final program results, including status and on time and on budget benefits delivery.

Stakeholder Conflicting Priorities Management

Stakeholders are almost always engaged in multiple programs within an organization. Thus, they deal with the conflicting priorities and time constraints. Management of conflicting priorities ensures the stakeholders’ needed levels of engagement. A program manager manages conflicting stakeholder priorities during all phases of the program utilizing the stakeholder engagement management process.

During the program definition phase, a program manager engages stakeholders and ensures the necessary levels of engagement in a program. During an initial stakeholder engagement, a program manager shares program details with the stakeholders, including defining program benefits. A program manager defines a necessary level of influence over a program with each stakeholder.

During the benefits delivery phase, a program manager updates stakeholders about a program's progress and benefits delivery. And, a program manager engages stakeholders to mitigate risks and remove barriers.

During the program closure phase, a program manager shares program benefits delivery results with stakeholders and updates stakeholders about the program, including status and on-time and budget benefits delivery.

¹ Martinelli, R. J., Waddell, J. M., & Rahschulte, T. J. (2014). Program management for improved business results. (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.

² PMI. (2013). The standard for program management – Third edition. Newtown Square, PA: Author.

³ PMI. (2013). The standard for program management – Third edition. Newtown Square, PA: Author.

⁴ Martinelli, R. J., Waddell, J. M., & Rahschulte, T. J. (2014). Program management for improved business results. (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.

⁵ PMI. (2013). The standard for program management – Third edition. Newtown Square, PA: Author.

⁶ PMI. (2013). A guide to the project management body of knowledge (PMBOK® Guide) – Fifth edition. Newtown Square, PA: Author.